TSMC shares climbed 6.3% in early trading following strong guidance and evidence of accelerated demand from major AI clients. The rally lifted the broader semiconductor sector, with NVDA and AMD gaining over 4% and 3.8%, respectively.
- TSMC shares rose 6.3% on strong AI-related demand and production utilization above 90%.
- TSMC projects 18% YoY revenue growth in 2026, driven by advanced-node chip demand.
- 41% of TSMC’s 2026 capacity is pre-allocated to AI chip designs.
- NVIDIA (NVDA) and AMD (AMD) gained over 4% and 3.8%, respectively.
- SMH ETF surged 5.1%, XLK rose 2.9% as tech sector momentum builds.
- TSMC’s market cap now exceeds $1.2 trillion.
Taiwan Semiconductor Manufacturing Company (TSM) posted a 6.3% surge in morning trading, driven by new data indicating increased orders from leading AI chipmakers. The company confirmed that its 3nm and 2nm production lines are operating at over 90% capacity through Q1 2026, citing sustained demand from clients including NVIDIA and AMD. This marks a significant uptick from the 75% utilization reported in late 2025. The rally reflects broader market confidence in AI-driven semiconductor growth. TSMC’s guidance now projects 18% year-over-year revenue growth for 2026, with the majority attributed to advanced logic chips. This strong outlook has amplified gains across the semiconductor sector, with the Semiconductor HOLDRS ETF (SMH) rising 5.1% and the Technology Select Sector SPDR Fund (XLK) gaining 2.9%. Key indicators suggest supply chain reconfiguration is underway. TSMC reported that 41% of its 2026 production capacity is already pre-allocated to AI-specific designs, up from 29% in 2025. Simultaneously, NVIDIA’s (NVDA) market share in AI inference chips reached 68%, supporting the demand narrative. AMD (AMD) also confirmed a 24% increase in 3nm-based chip shipments month-over-month, reinforcing the shift toward high-performance computing. The momentum has spilled into related markets, with investors repositioning toward semiconductor equipment makers and foundry services. The rise underscores the sector’s centrality in the global AI infrastructure build-out, with TSMC’s market cap now exceeding $1.2 trillion—making it the second-largest publicly traded company globally by valuation.